Wednesday Morning Cheat Sheet: 3 Stories Moving Markets

Markets advanced in Asia on Wednesday. Japan’s Nikkei index climbed 0.74 percent, once again closing at a five-year high. The Hang Seng climbed 0.86 percent and the S&P/ASX 200 jumped 1.09 percent, fueled by better-than-expected trade data out of China.

European markets also advanced in mid-day trading, supported by strong industrial production data out of Germany. The DAX was up 0.61 percent, London’s FTSE was up 0.21 percent, and the STOXX 50 index was up 0.43 percent.

U.S. futures at 8:35 a.m.: DJIA: +0.09%, S&P 500: -0.09%, NASDAQ: +0.04%.

Here are three stories to keep an eye on:

1) China’s Trade Balance Surprises Again: Analysts have long been skeptical of Chinese import and export data, and April’s report is no different. The nation reported a 14.7 percent jump in exports and a 16.8 percent jump in imports, beating respective consensus estimates of 11.0 and 14.0 percent. Fueled by the growth, China’s trade balance swung from an $880 million deficit in March to a surplus of $18.2 billion in April, beating estimates for a surplus of $14.0 billion.

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There are any number of theories about why the official figures rarely match up to expectations. Chief among them is a form of gamesmanship that involves exporters issuing fake invoices to people who want to transfer currency into the country. This creates false export data and allows companies to dodge around China’s tight currency controls.

2) There’s At Least One Bright Spot in Europe’s Economy: German industrial production climbed 1.2 percent on the month in March, a tremendous surprise compared to the consensus estimate of a 0.1 percent contraction. On the year, it is still off 2.5 percent, but this is a much softer decline than the -3.6 percent that economists were expecting.

These data suggest that first-quarter industrial production climbed as much as 0.2 percent sequentially, which compares against a 2.6 percent contraction in the fourth quarter. A separate report, the Markit Construction PMI for Germany, showed a minor decrease in construction activity in April. “Improving orders and catch-up effects in the construction sector should give the production sector a further boost over the coming months,” the Economics Ministry said in its release.

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3) Bill Gates: The Rich Must Return Money to the Government: It is now five months into 2013, and the United States government is still far away from working out a deficit-reducing measure. In fact, Republican representative Paul Ryan of Wisconsin, chairman of the House Budget Committee, said at the Peterson Foundation fiscal summit in Washington on Tuesday that he doubted that lawmakers in Congress could agree on a significant plan to tackle the budget deficit and other fiscal problems.

Before the summit began, Bill Gates met with Bloomberg Television’s Al Hunt, who questioned the Microsoft (NASDAQ:MSFT) co-founder on his thoughts on the state of the U.S. economy… (Read more.)

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